Farage's 'fantasy' policies will lead to Liz Truss-style economic meltdown, Starmer to warn

Nigel Farage's "fantasy" policies will lead to a Liz Truss-style economic meltdown, the prime minister will warn today.

Sir Keir Starmer is set to argue that Reform UK's pledges would cause mortgages, bills and rent payments across the country to surge. On Tuesday, Mr Farage vowed to reverse cuts to winter fuel payments and scrap the two-child benefit cap, with an ambition to slash income tax.

But new analysis from the Institute of Fiscal Studies suggest that his party's aim of hiking the personal allowance to £20,000 a year could cost between £50bn to £80bn a year. Visiting manufacturing workers in the North West, Sir Keir will describe Reform's economic agenda as a "mad experiment".

He is expected to say: "In opposition we said Liz Truss would crash the economy and leave you to pick up the bill. We were right - and we were elected to fix that mess.

"Now in government, we are once again fighting the same fantasy." Labour is criticising Mr Farage for betting "that you can spend tens of billions on tax cuts without a proper way of paying for it". The prime minister will add: "Just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip.

The result will be the same. Liz Truss bet the house and lost." Sir Keir is referring to the former prime minister's mini-budget in 2022, which had proposed abolishing the top 45% rate of income tax.

But this policy, among others, spooked financial markets and led to economic turmoil in the UK - with a dramatic spike in the cost of government borrowing feeding through into interest rates. Mr Farage has argued that his measures can be paid for by scrapping net zero commitments and ending the use of hotel accommodation for asylum seekers.

Recent polls have put Labour second behind Reform UK, while the local election results earlier this month saw Mr Farage's party win a parliamentary by-election, control of 10 councils and two mayoralties, while Labour lost almost 200 seats. Sir Keir has been under pressure from his backbenchers to regain the initiative, leading to the party's U-turn on winter fuel payments last week.

Plans to scrap the two-child benefit cap have also not been ruled out by ministers, in what would be a second reversal of current Labour policy. Dominic Cummings, the former top aide to Boris Johnson, exclusively told Sky News he believes Mr Farage could "definitely" become the next prime minister, with the right strategy..